Inheritance tax reliefs slashed 33%
We spend our whole lives working and saving money only for are relatives to get a bad deal upon our death. Inheritance tax has been falling in real terms for 3 decades. The value Of Inheritance tax reliefs has been cut by a 3rd because the government has not raised it to be in line with inflation.
This is not good news for the savers and their relatives.
Peter Goodman, partner at Wilkins Kennedy, says: “Simple reliefs such as the annual allowance on transfers or gifts are very popular, but £3,000 doesn’t go as far today as it did in 1981. People will quickly use up this allowance.”
“This means families are forced to look into alternatives. The regular ‘gifts out of income’ relief is a more generous and flexible relief, but it requires a lot of record-keeping prior to a death and many families will only realise that when it’s too late.”
What most people don’t realise is that relatives of those men and women who served in the British Army are exempt from inheritance tax, but only if the death was caused by an injury or illness whilst on active service.
In a recent court case over the estate of a war veteran, a chance comment made by a relative saved the estate a £330,000 IHT bill. The former Wren died from Mesothelioma (a rare form of cancer), which had been caused during her WW2 years spent working in buildings constructed of asbestos.”
Earlier in 2012, Unbiased.co.uk revealed that UK taxpayers would waste £448m this year due to poor inheritance tax (IHT) planning when it comes to their life insurance policies.
By managing your estate wisely whilst you are still able to could reduce your beneficiaries exposure to inheritance tax by making efficient use of Inheritance tax reliefs and can also simplify the administration of your estate.